Calculation of current and deferred tax, and adjustment entry   LO4, 5 Bear Ltd’s accounting profit before tax for the year ended 30 June 2021 was $150 000. At 30 June 2020 and 30 June 2021, the company’s draft statements of financial position showed the following balances. 2020 2021 Assets Cash $ 40 000 $ 50 000 Inventories 150 000 160 000 Accounts receivables 300 000 420 000 Allowance for doubtful debts (15 000) (21 500) Prepaid insurance 20 000 15 000 Equipment 200 000 260 000 Accumulated depreciation — equipment (100 000) (146 000) Buildings 400 000 400 000 Accumulated depreciation — buildings (140 000) (160 000) Goodwill 40 000 40 000 Deferred tax asset 45 000 ? Liabilities Accounts payable 255 000 270 000 Accrued expenses 120 000 90 000 Mortgage loan 210 000 210 000 Warranty payable 70 000 50 000 Current tax liability 9 000 ? Deferred tax liability 12 000 ? Additional information • The company tax rate is assumed to be 30%. • During the year ended 30 June 2021, Bear Ltd received a non‐taxable royalty revenue of $20 000. • Amounts received from sales, including those on credit terms, are taxed at the time the sale is made. Bear Ltd recognised $20 000 in Bad debts expense during the year ended 30 June 2021. • Insurance expense incurred during the year ended 30 June 2021 was $20 000. The amounts paid in cash for insurance are allowed to be claimed as deductions for tax purposes. • The equipment is depreciated on a straight‐line basis over 5 years for accounting purposes and over 4 years for taxation purposes. The equipment is not expected to have any residual value. The only movement in the equipment account during the year ended 30 June 2021 was a result of Bear Ltd acquiring a new equipment on 1 January 2021. • The buildings are depreciated on a straight line basis over 20 years for accounting purposes and are not expected to have any residual value. Depreciation of buildings is not allowed to be claimed as a deduction for tax purposes. There is no movement in the buildings account during the year ended 30 June 2021. • During the year ended 30 June 2021, Bear Ltd paid accrued expenses of $210 000 and recognised $45 000 in warranty expense. These expenses are not deductible for tax purposes until they are actually paid. • There are no other items that cause differences between accounting and taxable profit. • During the year ended 30 June 2021, Bear Ltd paid the Australian Taxation Office the following instalments for income tax: 1. 28 July 2020: $9000 2. 28 October 2020: $7000 3. 28 February 2021: $7500 4. 28 April 2021: $8000. Required 1. Prepare the current tax worksheet and the journal entry to recognise current tax at 30 June 2021. 2. Prepare the deferred tax worksheet and journal entries to adjust deferred tax accounts.